Thursday, June 11, 2009

From CNN Money, most utilities in the US do not make sufficient investment in energy efficiency programs, or fail to advertise.

This gets right back to incentive structure, which is a huge issue in health care. Most utilities make more money by selling more electricity. A few jurisdictions, such as California (US), Ontario (Can) and Victoria (Aus), have decoupling schemes that address this:

U.S. utilities, in particular, may soon get a regulatory kick in the pants when it comes to energy efficiency initiatives. As it stands now, The American Energy and Security Act currently working its way through Congress would require utilities to reduce 10 percent of their electricity demand by 2020. If that act, or other policies, drives utilities to get more serious about energy efficiency, the good news is that they’d have at least a few positive models to follow.

Some regions or jurisdictions — California; Ontario, Canada; Victoria, Australia; and the Netherlands, to name a few — have utilities that are rolling out effective initiatives for customers to reduce energy use, Sumic noted. One reason the utilities are more aggressive with these energy-saving initiatives is because they operate under regulatory environments, often called “decoupling,” in which the revenue they generate is not directly tied to how much power they produce — in essence, driving down their customers’ energy bills won’t affect their bottom lines. As a result, utilities regulated in this way are offering programs like time-of-use billing and demand response.

Some are bullish that decoupling will eventually make it to the federal level, instead of being driven by progressive states. The stimulus package gives a nod to utility decoupling but shies away from more aggressively enforcing it.